The impact of outward FDI on the performance of Chinese multinationalsThe impact of outward FDI on the performance of Chinese multinationals

Author

Cozza, Claudio

Rabellotti, Roberta

Sanfilippo, Marco

Faculty/Department

Institute of Development Policy and Management

Publication type

report

Publication

20142014

Subject

Economics

Source (journal)

BOFIT Discussion Papers

Volume/pages

(2014)
, p. 1-32

ISSN

1456-4564

1456-5889

ISBN

978-952-323-012-5

Article Reference

24

Carrier

E-only publicatie

Target language

English (eng)

Affiliation

University of Antwerp

Abstract

Using a new firm-level database, EMENDATA, this paper investigates the effects on Chinese multinational enterprises of Outward FDI (OFDI) into advanced European countries. Propensity score matching is combined with a difference-in-difference estimator to reduce the problems of self-selection of treated firms in foreign markets and to eliminate time-invariant and unobservable differences between those firms and the controls. The results provide robust evidence in support of the view that Chinas OFDI had so far a positive impact on domestic activities in enhancing firms productivity and scales of operation, as measured by assets, sales and employment. Distinguishing among such investments on the basis of entry mode shows that acquisitions facilitate early access to intangible assets but are detrimental to financial performance, whereas greenfield investments have a positive impact on the scale and productivity of Chinese investors.